NEW YORK -- Investors concerned about the deteriorating situation in Iraq looked past solid earnings from General Electric Co. and Yahoo! Inc. Thursday, sending stocks mostly lower and leaving Wall Street with a loss for the holiday-shortened week.

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While GE, which posted earnings in line with Wall Street estimates, is seen as a gauge of the overall economy due to the conglomerate's diverse businesses, the threat of increased violence in Iraq and possible consequences from terrorism kept investors from making large bets.

"The market is now in a duel between good economic numbers, good earnings, and the situation in Iraq," said Peter Cardillo, chief strategist and senior vice president at S.W. Bach & Co. "With the market trading at the upper end of its trading range for the year, it induces people to take some money off the table."

Trading was quiet and volume light, with many investors and traders taking time off for the holidays. The stock market was scheduled to close for Good Friday.

The Dow Jones industrial average was down 38.12, or 0.4 percent, at 10,442.03. The Dow had gained more than 60 points in early trading before falling back.

Broader stock indicators were narrowly mixed. The Standard & Poor's 500 index was down 1.21, or 0.1 percent, at 1,139.32, while the Nasdaq composite index gained 2.64, or 0.1 percent, to 2,052.88.

For the week, the Dow lost 0.3 percent, while the S&P 500 and Nasdaq both dropped 0.2 percent. The losses followed the market's best week of 2004.

The first round of earnings should have been good news for investors who have been concerned about Iraq and the rapid rise in share prices over the past two weeks. General Electric was up only a penny at $31.41, however, as investors remained cautious.

"We have pretty good earnings out of General Electric, and the retailers are all reporting pretty strong sales through March. Barring any new terrorist attacks, it's very hard, from my perspective, to find anything to worry about," said Lincoln Anderson, chief investment officer at LPL Financial Services. "But for whatever reason, a lot of people still remain skeptical. I'm not at all."

But at least one analyst cautioned that it was too early to make any big moves before more earnings come out.

"We are very early into earnings season, and with Iraq and everything else, we're kind of in a wait-and-see mode," said Stephen Massocca, president of Pacific Growth Equities. "One number from Yahoo does not bake a cake, so to speak. We'll need to see a lot more earnings before the market picks a direction."

Yahoo surged $7.86, or 16 percent, to $56.21 after the Internet company beat analysts' expectations by 3 cents per share and recorded a quarterly profit that surpassed its annual earnings during the dot-com boom. The company also announced a 2-for-1 stock split.

Spurred by strong sales of its cancer treatment Avastin, biotechnology company Genentech Inc. beat Wall Street estimates by 6 cents per share for the first quarter. Genentech jumped $3.55 to $112.00.

Among the companies positively updating their earnings outlooks, Dell Inc. was up 81 cents at $35.63, Sharper Image Corp. gained $1.91 to $32.57 and J.C. Penney Co. Inc. rose 7 cents to $34.64.

Penney, like many other major retailers, reported a fourth straight month of healthy sales. But the market's pessimistic mood helped send a number of retail stocks lower. Target Corp. was down 64 cents to $44.17, while Gap Inc. was off 52 cents at $21.81.

Thursday's session marked the first day of trading under a new roster for the Dow. AIG Inc., Pfizer Inc. and Verizon Communications replaced Eastman Kodak Co., International Paper Co. and AT&T Corp. in the index.

The new Dow components were expected to fare well, with the departing stocks struggled as index-based funds adjusted their portfolios to accommodate the change, announced last week. However, the afternoon downturn took its toll. AIG gained 2 cents to $76.27, Pfizer dropped 7 cents to $35.60 and Verizon was unchanged at $37.31.

Of the departing stocks, AT&T Corp. slipped 29 cents to $19.23, International Paper fell 39 cents to $42.01 and Kodak dropped 5 cents to $25.44.

Declining issues outnumbered advancers by more than 2 to 1 on the New York Stock Exchange, where consolidated volume came to 1.52 billion shares, compared with 1.87 billion on Wednesday.

The Russell 2000 index of smaller companies was down 3.76, or 0.6 percent, at 597.88.

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